Finding the Middle Ground

A construction industry already struggling with rising materials costs could lose as much as 11% of its workforce under immigration legislation currently being debate in the nation's capital.

The Border Protection, Antiterrorism and Illegal Immigration Control Act (H.R. 4437), adopted in the House last year under strong Democratic opposition, would enforce existing immigration law through deportation. That would involve rounding up immigrants now illegally residing in the United States, a number estimated at 11.5 million to 12 million, according to The Pew Hispanic Center.

That could mean a crippling loss for the construction industry. Foreign-born workers account for about 2.4 million of the nation's construction workers, or 23% of the industry's workforce, according to the National Association of Home Builders.

While there's no hard data on their legal status, some estimates suggest that as many as half of those 2.4 million workers are undocumented — more than a tenth of all U.S. construction workers — despite the illegality of hiring an undocumented immigrant.

Replacing deported construction workers, as well as those who provide general maintenance services at existing properties, would increase costs to the real estate industry substantially, says Kelly Knott, director of government relations for the Associated General Contractors of America. Some experts estimate that the cost of labor could spike by as much as 30%, if the House bill is adopted as law.

The contractor's association opposes the House bill, contending representatives did not have time to understand the bill's impact since it passed in just one week. The organization also is opposed to the measure's mandatory employer sanctions and fines — a $25,000 fine for incorrect paperwork, for example — and because it offers no solutions for meeting the nation's economic or labor needs.

“This bill passed because there was no other alternative,” Knott contends. “Representatives viewed this as the only opportunity they had to go back to their constituents and say they did something. [The conventional wisdom] is that this is the only train leaving the station, and I can't afford to not be on it.”

Senators propose alternatives

Political experts say senators generally agreed that H.R. 4437 was unacceptable immigration reform, but Senate versions introduced in the wake of the House bill's passage stalled in bi-partisan debates.

The most promising Senate bill is the Comprehensive Immigration Reform Act of 2006 (S. 2611), introduced in mid-May. The measure would provide approximately 11 million undocumented immigrants with permanent-resident authorization within six to eight years. It also increases family and employment-based immigrant visas and provides for a temporary worker program with protections for American workers.

The Senate bill was expected to reach — and pass — a Senate vote by the end of May, after press deadlines. Proponents agreed to compromises to make the bill more palatable to conservatives, including a call for 370 miles of border fences and 500 miles of vehicle barriers.

Builder associations favor S. 2611 because it would retain the country's existing immigrant construction workforce. Moreover, the guest worker program would help fill newly created positions within the real estate industry. Home builders expect to build 18 million new homes in the next decade, requiring 1 million additional workers, even if the nation manages to retain undocumented workers, the NAHB estimates. “The trickiest of the issues is how to deal with the undocumented,” Knott says. “I am hopeful that the Senate will approve the bill and send it on.”

Compromise will be difficult

An almost polar division exists between proponents of the House and Senate measures, centering on the treatment of immigrants already in the United States illegally. The House measure subjects such individuals to prosecution as felons, while the Senate proposal is likely to offer illegal immigrants a path to legitimate worker or resident status, criticized as an amnesty program by opponents.

President Bush appears to favor the Senate's approach, perhaps against the sentiments of his own party. During a primetime address on May 15, Bush called for a comprehensive immigration bill that provides resources to secure borders, creates a temporary guest worker program, ensures the development of a better worker documentation program, and enables immigrants already in this county to become U.S. citizens. (The day after the speech, polls showed that 75% of Americans favor a comprehensive immigration bill compared with just 50% prior to the address.)

Even if the Senate approves a bill, however, it will be difficult for a conference committee to reconcile such disparate House and Senate measures, according to Jim Arbury, senior vice president for government affairs at the National Multi-Housing Council. “I would say that chances of passing a comprehensive bill are getting slimmer each day.”

Jennifer Popovec is a frequent contributor to NREI and its sister publication Retail Traffic. She holds a master's degree from Northwestern University and is based in Dallas, Texas.